RBI Advises Banks to Resolve 55 Big NPAs within 6 Months

Reserve Bank of India in their notification advised all Banks with a list of 55 chronic and big 55 NPAs within 6 months or notify to be put under new Insolvency & Bankruptcy Code Mechanism so that the NPA level in banks could be minimised.

Previously 12 accounts with NPA figure of Rs.5000 Crores or above were notified to be resolved with Insolvency Resolution Mechanism, by RBI.

While directing the Banks, RBI intends to start proceedings under Insolvency & Bankruptcy Code (IBC) if any solution to 55 cases is not found within 6 months

It is important to mention that there areRs.8 Lakh Crores of NPAs in the Banking System of which Rs.6 Lakh Crores in locked in Public Sector Banks. By identification of 12 accounts by RBI, more than Rs.2 Lakh Crores is saddled in these accounts as NPA, RBI has started action under IBC which is a time bound case in the hands of National Company Law Tribunal (NCLT)

After submission to NCLT, the Banks would have to appoint lawyers dealing in insolvency cases within 30 days to resolve the issue within 180 days by either revival or going for liquidation.

RBI has been armed with special powers to conquer NPA via Banks. RBI can take action against the erring borrowers with urgent measures. For particular sector related issues for difficulties faced by borrowers and save the sanctioning/loans recasting authorities for cases where loans sanctioned/recast with bona-fide intentions.

Oversight Committees also have been given more powers with more members to solve the NPA problems.